A man waits in line at The Source dispensary, Saturday, July 1, 2017, in Las Vegas. Residents of Henderson, just down the road, will also soon have access to recreational marijuana. (John Locher, Associated Press)

Second-biggest city in Nevada lifts weed ban; sales could start in weeks

Pot shoppers in Henderson will soon be able to legally purchase the plant for recreational use after the Henderson City Council voted Tuesday to end a moratorium that had been in place since February.

The council voted 3-to-2, with Mayor Debra March, Councilwoman Gerri Schroder and Councilman Dan Shaw voting in favor of repealing the moratorium and Councilmen John Marz and Dan Stewart voting against the measure. The vote set a path for five dispensaries in Henderson as well as over a dozen combined cultivation, testing and production facilities to begin operating in the recreational market.

“The citizens approved it and we need to recognize that,” Shaw said. “Kicking the can down the road is not going to solve the issue.”

Licensed marijuana facilities with a state-issued “early start” permit to begin recreational sales on July 1 must now apply for a local permit and business license, said Nevada Dispensary Association President Andrew Jolley, who also owns The+Source dispensary in Henderson.

The entire process is expected to take about a month, Jolley said, adding that Henderson dispensaries will begin selling the plant as early as October and no later than December.

“It’s only fair you allow for retail sales in that jurisdiction,” Jolley said. “There are enormous societal and economic benefits in terms of creating jobs and tax revenue and taking away from illegal black market sales.”

Also present at Tuesday’s meeting, Armen Yemenidjian of Essence Cannabis Dispensary said the vote to open recreational sales made doing marijuana business in Henderson worth the expenses that owners are putting into the plant.

Yemenidjian said pot stores in Nevada “break even or lose money” under the medical-only model, while legalized recreational sales make a profit. He argued that if Nevada remained a medical-only state, more than half of the state’s 60 operating pot stores would already be closed.

“It’s the difference between a business that loses money and a business that is able to have a profit margin,” he said.

Presenting before the vote, economic analyst Jeremy Aguero of Applied Analysis said city taxes and fees for recreational pot businesses would bring Henderson $1 million in public revenue for fiscal year 2018 and over $5 million annually by 2021. Total marijuana sales revenue in Henderson is expected to reach $10 million next year and exceed $80 million by 2021 Aguero said.

All five dispensary owners in Henderson control dispensaries in other cities where recreational pot sales are legal, meaning Jolley, Yemenidjian, Randy Black of Nevada Medical Marijuana, David Rosen of Jenny’s Dispensary and Steve Menzies of The Dispensary “shouldn’t have too many issues” with the logistics of kicking off recreational sales in Henderson, Jolley said.

Jolley said the dispensary association would seek guidance from the Nevada Department of Taxation on whether the current medical marijuana supply at Henderson facilities would be valid for sale as recreational product when such sales begin. The department allowed Nevada dispensaries in cities where recreational sales started on July 1 to sell their medicinal product as recreational product as litigation tied up shipments of the recreational product from cultivation and production facilities to dispensaries.

While a growing number of distribution licenses have been issued since July 1, Jolley said he hoped the taxation department would allow the same initial leniency for Henderson dispensaries through their first weeks of sales as other Nevada dispensaries.

“We’ve ramped up a lot in the past two or three months and we’re ready to open in Henderson,” he said.

The city council on Feb. 7 voted for a six-month moratorium that would have expired last month, after originally considering a yearlong moratorium as early as January. They voted to expand the moratorium to this month before it was quashed with Tuesday’s vote. Medical marijuana was not banned in the moratorium.

Nevada legalized up to one ounce of marijuana flower or one-eighth ounce of the THC equivalent of concentrates for recreational use and possession on Jan. 1 following the passage of last November’s Ballot Question 2. Recreational sales of the plant began on July 1 after temporary regulations from the Nevada Department of Taxation and Nevada Legislature were approved earlier this year.

Permanent regulations, as called for by the original start date for recreational marijuana sales per Ballot Questions 2, do not take place until Jan. 1.

Voting in opposition to Tuesday’s measure, Marz called Henderson a “premier city” and said recreational marijuana threatens that distinction. While Marz voted in favor of lifting a moratorium on medical marijuana in 2015, he argued the city was “jumping into this way too early.”

“The jury’s still not out yet,” Marz said after jokingly threatening a 10-hour filibuster on the vote. “We should have waited to see what happened in other cities and states.”

Editor’s note: Brian Greenspun, the CEO, publisher and editor of the Las Vegas Sun, has an ownership interest in Essence Cannabis Dispensary.